Business Loan Documents for a company

Business Loan Documents

In this article, we would discuss various business loan documents that are required by a NBFC or a bank for availing a business loan. Business loan is a loan that is provided for businesses to enhance their business potential and increase their revenue

Business Loan documents for a Private Limited company

For a private limited company operating their business, list of documents required are comparatively more than a partnership or a proprietorship firm. Banks and financial institutions ask for these documents to establish credit worthiness and identity of a private limited firm.

In case of a private limited firm, liability of the company is different from the director or promotor. Thus, banks usually establish creditworthiness of the firm before establishing credit worthiness of the promotor or guarantor.

Banks and financial institutions asks for following documents from a private limited company for a business loan –

1. Bank statement – Bank statement for the past 12 months is usually required by a bank for verifying business credits, equity infusion, salary paid to employees, EMI deduction etc. care should be taken to submit bank statement not older than 15 days from the date of application. If possible, bank statement should directly be downloaded from bank’s website in a PDF format. Current account statement should be shared with the bank.
2. Business Registration Proof – A business registration proof must be provided in business loan documents. With the implementation of GST rule, banks can take GST registration as a valid proof of registration for a business loan. Other registration proofs such as IEC code, MSME certificate, Udyam registration are also valid registration documents for a business loan
3. PAN card copy – PAN card copy of all the directors is a mandatory requirement for a business loan. A business loan is an financial transaction and PAN is mandatory to be provided for inputting data to credit burau for the directors as well as establishing identity of the individual. Though, it is to be noted that a PAN card is not a valid proof of address.
4.   Aadhar card copy – A valid Aadhar card copy should be presented along with other business loan documents mentioned above. Aadhar is a valid proof of residence as well proof of address under Indian law
5. Company PAN card – For a business loan , PAN card of the company should be generated along with other documents required for a business loan.
6. Audited Financials – Banks will also ask for audited financials of the company for past 3 years to establish financial viability of the firm.

Apart from above mentioned loan documents banks can ask for additional documents such GST returns copies, electricity bills, property papers etc to verify a company’s credit worthiness. It is to be noted that above mentioned documents are initial and starting list of documents that are required for business loans by various NBFCs and banks.

In this article, we have explored various documents required for a business loan by a private limited company. If you want to read further on various trade licenses that are required to set up a business in India, you visit the following link.

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